tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, August 2nd, 6:57PM

Mortgages

Mortgage Rates Daily Commentary
Friday 30 July 2021  Add your comment
FSCL case highlights clawback danger

A case study posted by FSCL has highlighted the potential risks with clawback clauses. A mortgage adviser has been forced to drop their request for a commission clawback following a dispute: [READ ON]

rss
Latest Headlines

Post-earthquake OCR cut unlikely

Don’t expect the Reserve Bank to cut the OCR again following the earthquakes earlier this week - despite the damage and disruption they have caused, economists say.

Friday, November 18th 2016, 11:24AM 1 Comment

by Miriam Bell

Following the devastating February 2011 Canterbury earthquake, the Reserve Bank cut the OCR by 50 basis points.

But, while the recent earthquakes have caused significant damage to a number of towns, cities and key infrastructure, a similar response from the Reserve Bank this time round is not on the cards.

ANZ chief economist Cameron Bagrie said that with the economy already operating at, or near capacity, this is a vastly different backdrop than during the Christchurch quakes.

This is important as when an economy is recording strong momentum it has a great deal more resilience to cope with negative shocks, he said.

“Finding the necessary resources will present challenges for the reconstruction effort; in a capacity-constrained economy the “boost” from a rebuild becomes negligible as you are merely shuffling resources around.

“There will be inflation consequences but the one-off impact can be looked through.”

Bagrie said markets are not reading too much into it at this stage and while it is a dampening influence on the solid New Zealand story, it is really a margin-of-excellence tweak.

“We do not buy into the view that this increases the odds of additional monetary policy easing as was seen after the Christchurch quakes.

“That would require a significant hit to confidence and activity, which we do not envisage at this stage.”

The recent earthquakes have had a devastating impact on a number of areas and on infrastructure, but this is not a Christchurch repeat, BNZ head of research Stephen Toplis agreed.

There might be a modest short term hit to GDP, which will be reversed, and further pressure will be placed on the already heavily capacity constrained construction sector, he said.

“This being the case, those that think this event will encourage the Reserve Bank to cut interest rates are likely to be barking up the wrong tree.

“At the margin, the medium term inflationary pressures that will be created will do exactly the opposite.”

ASB chief economist Nick Tuffley took a slightly different view.

He said that, at the margin, the earthquakes could increase the odds of another OCR cut by the Reserve Bank next year if the economic disruption is greater than currently anticipated.

“But, barring the Canterbury earthquakes, other recent natural disasters have had little overall discernible impact on New Zealand growth. We largely expect this to be the case again.”

Economic activity may well take a hit in the worst-affected areas, but the lingering effect from the quakes is likely to be higher inflation.

“With the broader economy in good shape and the earthquakes slightly inflationary if anything, we continue to expect the Reserve Bank to keep interest rates firmly on hold for the foreseeable future.”

 

Tags: ANZ ASB BNZ interest rates OCR OCR forecasts RBNZ Reserve Bank

« US election casts shadow over OCR responseRBNZ asks for DTI tools »

Special Offers

Comments from our readers

On 21 November 2016 at 9:37 am DT said:
No one is interested in OCR cuts any more since the banks all adopted the policy of not passing on any cuts to depositors or borrowers a few months back. You may have noticed the November OCR cut received no attention in the media, as OCR cuts no longer have any follow -on affect

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 2 August 2021 9:09am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com